Barings has agreed to sell the collateral securing the $590 million JW Marriott Marco Island Beach Resort loan (JW 2024-MRCO) to Sculptor Diversified REIT, Inc. for $835 million. The collateral includes the 809 key, full-service luxury resort on beachfront property in Marco Island, FL, as well as the two 18-hole golf courses. Sculptor stated the transaction is expected to close on or before May 1, 2026, subject to customary conditions, and that it plans to renovate the property’s amenities and guest rooms, with most of the capital expected to be deployed by the second year of ownership.

The $425 million The JACX loan (BAMLL 2021-JACX) transferred to special servicing during the March 2026 remittance period for imminent default ahead of its September 2026 maturity. The transfer follows continued occupancy pressure stemming from Macy’s (54% of GLA) dark space and WeWork’s November 2023 departure from 217,111 sf (18%), a portion of which the sponsor backfilled with its Studio by Tishman Speyer coworking affiliate. Although Macy’s lease runs through 2040, the tenant has contraction options on three floors beginning in 2029. The loan is secured by a 1.2 million sf, class-A office property in Long Island City, NY.

Foreclosure status was assigned in March 2026 for the $24.5 million One Parkway North Fee loan (BMARK 2018-B2) after transferring to special servicing in the February 2026 remittance period due to monetary default. The borrower and lender have been unable to agree on a path forward, and a receiver was subsequently appointed in February 2026. The loan is secured by the borrower’s leased fee interest in the ground beneath a 257,394-sf suburban office complex in Deerfield, IL.

The $33.0 million Westin Memphis loan (JPMDB 2016-C4) transferred to special servicing in March 2026 due to imminent monetary default. Net cash flow for the year ending December 2025 declined 64% from underwritten expectations. Of additional concern, servicer commentary indicated that $579,000 of taxes remained delinquent and were owed to the city as of October 2025. A workout strategy has not yet been determined. The loan is secured by a nine-story, 203-key full-service hotel in downtown Memphis, TN.

The 1.8 million-sf 1500 Market Street property securing JMPCC 2020-MKST sold for $94.0 million ($53/sf), near our concluded value of $87.2 million ($50/sf), marking a steep discount for one of Center City Philadelphia’s largest distressed office assets. The largely vacant property has been in special servicing since August 2022 and had been marketed for sale since September 2025. The transaction represents a significant reset in value and follows our previous credit alert noting that the asset was under contract for less than $100 million. Buyer PMC Property Group, together with investor Dean Adler, plans a mixed-use redevelopment that could include an apartment conversion, a 300-room hotel, renovated office space, and wellness-focused ground floor retail.

An updated appraisal in March valued the collateral securing the $260.0 million Illinois Center loan (CGCMT 2015-GC33, GSMS 2015-GC34, CGCMT 2015-C35) at $85.7 million ($41/sf), a 78% decline from the issuance value of $390.0 million ($186/sf). Additionally, an appraisal reduction amount (ARA) of $184.9 million was assessed in March 2026. The special servicer has pursued foreclosure as its primary workout strategy since early 2025 while also engaging in modification discussions with the borrower. The loan is secured by the borrower's fee interest in a portfolio that consists of 2.1 million sf of class-A office space in Chicago, IL.

The $60 million 7th & Pine Seattle Retail & Parking loan (CFCRE 2016-C6) transferred to special servicing in March 2026 without accompanying commentary and remained current in payment. The parking operator, SP Plus Corporation (“Standard Parking”), has a NNN lease scheduled to expire in October 2026, one month ahead of the loan’s November 2026 maturity, while property cash flows have struggled to consistently cover debt service. The loan is secured by a 361,650-sf condominium unit consisting of a 950-stall parking garage and 24,140 sf of ground-floor retail located in Seattle’s CBD beneath the Grand Hyatt Seattle hotel (COMM 2017-COR2, COMM 2018-COR3, JPMCC 2019-COR4), which serves as the collateral’s primary demand driver.

KCP reviewed its commercial mortgage-backed securities (CMBS) coverage universe and identified 11 properties securing eight loans—$4.2 billion by allocated loan amount (ALA)—across 14 transactions with exposure to Saks Fifth Avenue and Neiman Marcus closures announced in February and March 2026. In addition, KCP separately identified two lodging properties collateralizing two CMBS loans with exposure to closing Fifth Avenue Club locations.

In March 2026, SL Green announced that a global investment firm, later identified as The Carlyle Group, signed a 10-year lease at 245 Park Avenue (PRKAV 2017-245P, multiple conduits) for 150,036 sf (9%). The space, located on floors 23through 26, was previously leased to Angelo Gordon through February 2031, however the tenant was acquired by TPG in November 2023 and announced plans in November 2024 to lease over 300,000 sf in Hudson Yards, relocating from 245 Park Avenue and 888 Seventh Avenue. Given the new lease, we expect occupancy to remain at 98%. KCP highlighted additional leasing activity last month.

Round1 Bowling & Arcade has signed a lease for approximately 125,000 sf at Valencia Town Center (UBSBB 2013-C5). The venue is expected to open in early 2027 and is the first announced tenant tied to the property’s planned redevelopment, which was initiated following Centennial Real Estate’s acquisition of the mall in September 2023. The $186.6 million loan, secured by a 657,837-sf portion of a 1.1 million-sf regional mall in Valencia, CA, was first identified as a K-LOC in April 2022. Reported annualized September 2025 NCF for the collateral is down 60% since issuance and occupancy sits at 72%.